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Sony Chairman and CEO Howard Stringer
Ken Kutaragi: The thorn in Sony CEO Howard Stringer's side

In the past year, Sony as a company has been defined greatly by two events: the delayed launch of its PlayStation 3 gaming console and the battery recall that affected millions of customers. According to an interview with the Wall Street Journal, a lot of the negativity surrounding both is the result of internal strife in the company and a cultural disconnect between Sony CEO Howard Stringer and his Japanese executive team.

Much of the blame for the delay of the PS3 last year has been placed on Ken Kutaragi. Kutaragi, widely regarded as the father of the PlayStation repeatedly went over budget with PS3 development, yet failed to keep Stringer abreast of the problems.

Kutaragi blindsided Stringer again in a board room meeting with the announcement that the Japanese-market 20GB PS3 would have its price cut by 20%. “It wasn't financially one of my best moments," said Stringer. "The budget implications were self-evident. [But] I agreed because I wanted the launch to be successful."

Kutaragi also did his best to resist communication with key executives in other Sony divisions. Kutaragi famously held a Las Vegas launch party for the PlayStation Portable (PSP), yet failed to invite the heads of Sony electronics division -- the division that actually provides the components to make the PSP function.

After the missteps with the PS3, Kutaragi was "promoted out" of his position as President of Sony Computer Entertainment and was named chairman and CEO of SCEI.

Stringer goes on to say that the reluctance of his Japanese executive team to report problems to him was even more prevalent with the massive battery recall, which sparked in August of 2006. Instead of hearing the news directly from Sony employees, Stringer was first contacted about the problems by Michael Dell, founder of Dell Computer.

Stringer then, however, made a critical mistake by siding with his Japanese executive team and decided to remain quiet on the matter. The goal was to limit the vastness of the problem to Sony's components division. The reality of the matter was that the lack of response to the recall led to customers and the press to attack Sony as a whole, which did nothing for the company's reputation. Stringer likened the steady trickle of recall announcement from various notebook manufacturers to "a kind of Chinese water torture."

Some of the blame can be placed on Stringer. He decided not to have a permanent residence in Japan and instead lives in a hotel when he is in the country. He does, however, own homes in England and New York. "Mr. Stringer has no background and he's not in Japan managing the day-to-day," said Fitch Ratings analyst Tatsuya Mizuno. "Sony's DNA is in electronics...so the top management needs to understand what's going on there."

Stringer acknowledges that even a token residence in Japan would go a long way in promoting a synergy within his company. "[I should have] faked it better -- I mean that seriously," said Stringer. "I should've put the flag up the flagpole and said here's my residence in downtown Tokyo -- I'm here! -- even if it's less practical than living where I live, and much less comfortable and friendly."



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NICE !!!
By kattanna on 3/6/2007 12:00:59 PM , Rating: 4
quote:
After the missteps with the PS3, Kutaragi was "promoted out" of his position as President of Sony Computer Entertainment and was named chairman and CEO of SCEI


i just love failing upwards




RE: NICE !!!
By Naviblue on 3/6/2007 12:17:18 PM , Rating: 1
Wow, didn't think Sony was in this much of a mess...that's pretty retarded how Stringer is handling everything, I guess that's what it takes to become president of a billion dollar company, complete ignorance.


RE: NICE !!!
By retrospooty on 3/6/2007 12:24:54 PM , Rating: 3
"Wow, didn't think Sony was in this much of a mess"

Where have you been the past few years. If you went nowhere on the internet but AT/DT alone it should be abundantly clear.


RE: NICE !!!
By Naviblue on 3/6/2007 2:58:41 PM , Rating: 2
Well, I know Sony is seeing some rough times, especially with their recent stuff with the PS3 (launch, pricing, etc) and I'm also aware of the fact that many people here at AT/DT aren't very fond of Sony because of their practices or whatnot. I’ve always thought they had a good "edge" on things at least when it come to the aesthetics of their products. With everything under Sony's belt and being in the media constantly, one would have to think that there's competent management handling everything, wouldn't they?

Personally, I just think Sony needs to really start listening to their customers and take a timeout from their “pedestal” that they think they’re on, let someone else within the company to lead (come on, it doesn’t matter if you’re the “father” of this and that, their time to shine came, went and is long gone).

I don’t know about everyone else, but I honestly would like to see Sony succeed eventually, because if that happens, it benefits everyone, no?


RE: NICE !!!
By SunAngel on 3/6/07, Rating: -1
RE: NICE !!!
By Trisped on 3/8/2007 5:43:36 PM , Rating: 3
quote:
I've read a lot of negative comments on DT.
Don't you mean you have written a lot of negative comments on DT?

Personally, I don't think it matters where the CEO came from as long as they focus more on products and less on PR and tricks to get customers. Sony still makes good audio video equipment, it is just they other sections of the company that need work. I think most of these are add-ons that never quite worked their way up to Sony quality.


RE: NICE !!!
By retrospooty on 3/6/2007 8:00:22 PM , Rating: 3
"I just think Sony needs to really start listening to their customers and take a timeout from their “pedestal” that they think they’re on"

Totally agreed. That is a large part of the problem.


RE: NICE !!!
By ira176 on 3/7/2007 12:23:48 AM , Rating: 3
Sony has the pleas of valued customers making recommendations in one ear (stuff that makes sense), and the shouts of its investors in the other ear (make it more expensive and less functional). The squeaky wheel gets the grease.


RE: NICE !!!
By Lazarus Dark on 3/6/2007 1:30:07 PM , Rating: 4
I work for a multibillion dollar corporation, and I can verify that, yes, being a complete and total ignorant asshole is the first requirement for promotion to upper management levels.


RE: NICE !!!
By javiergf on 3/6/2007 2:43:17 PM , Rating: 1
I agree...


RE: NICE !!!
By darkpaw on 3/6/2007 5:36:15 PM , Rating: 2
Dammit.. I'll never be a CEO. I'm far too nice.


RE: NICE !!!
By retrospooty on 3/6/2007 8:01:45 PM , Rating: 2
sad but true. You almost have to forget what it's like to actually be a human to achieve that level.


RE: NICE !!!
By ira176 on 3/7/2007 12:27:30 AM , Rating: 1
It doesn't even have to be a multibillion dollar Corp. I live in a small town, where town employee imbeciles get promoted to high positions for doing little work, or for being total screw ups.


RE: NICE !!!
By otispunkmeyer on 3/7/2007 3:49:39 AM , Rating: 2
its abit backward isnt it?

the people at the top know diddly squat about the technology or engineering or any of that. they just have grade A's in BS and it gets them to the top.

you can kinda see it on dragons den when some one turns up with a highly technical product the dragons havent got a clue what the guys just said to them, then they feel threatened and spout off all this marketing and business BS to confuse the inventor back. ones waving his engineering willy, they are waving their business speak willys. its daft.

really it feels like all this business leet speak is just a solution to a problem that shouldnt exist in the first place. its fabricated by themselves so that they can justify what they are doing.


RE: NICE !!!
By hergieburbur on 3/7/2007 5:55:58 PM , Rating: 2
You forgot to add incompetent...


RE: NICE !!!
By scrapsma54 on 3/6/2007 4:20:37 PM , Rating: 2
quote:
Ken Kutaragi: the thorn in Sony CEO Howard Stringer's side


Thats harsh. I feel bad for Stringer, however. Because of ken, my ps3 only has 19 titles available after 4 months. Thanks you
idiot.


Hmmm
By nurbsenvi on 3/6/2007 1:08:42 PM , Rating: 2
It's not really related to this story but I heard that Samsung is actually bigger than Sony???

But how come?
Sony has Sony Pictures(HUGE), Sony BGM(Massive), Sony Electronics(Gigantic)and Sony Computer Entertainment(Enormous)

What does Samsung have that makes it bigger company than Sony?

I know Samsung is biggest in memory and LCD so mainly semiconductor business and bit of mobile phone but that's about it isn't it?




RE: Hmmm
By threepac3 on 3/6/2007 1:19:24 PM , Rating: 2
Well show us the source of the comment about Samsungs size. Then we can dispute it from there.


RE: Hmmm
By DanTMWTMP on 3/6/2007 1:31:40 PM , Rating: 5
http://en.wikipedia.org/wiki/Samsung
Revenue: 142 Billion
Net Income: 9.5 Billion
Employees: 229,000

"the world's largest manufacturer of DRAM chips, refrigerators, flash memory, optical storage drives"

Owns multiple sports teams worldwide.

They build tall buildings across the pacific rim.

I suppose they manage oil around the pacific, and build ultra humongous cargo ships.

If you go to Korea, you'll see Samsung cars, financial/banks/etc, Samsung Insurance, Samsung construction company, etc etc...

Kind of reminds me of the fictional company "umbrella" from the Resident Evil/Biohazard series.

http://en.wikipedia.org/wiki/Sony
Revenue: 64 Billion
Net Income: 1.05 Billion
Employees: 158,500

Sony seems to be more purely an entertainment electronics company, whereas Samsung just tries to dominate every aspect of your life (if you live in Korea).


RE: Hmmm
By afkrotch on 3/6/2007 5:00:52 PM , Rating: 2
Nah, Samsung is more like the ACME company from the Warner Brother's Bugs Bunny cartoons.

They can build you a fridge, building, phone, heavy machinery, and a machine gun robot. They can even help you finance it and insure it for you too. Then house you in their hotel while you are doing such.

They do not build cars, but while living in Korea for a year, they are very prevelant. Shoot, they are that way in much of Asia.

The reason Samsung is doing so well, is because they were the Sony of old. Much like Sony in the past, Samsung is innovative and spend lots of money on R&D, to create new and better products.

Sony still creates new products, but they try to hold onto it for longer than needed. How long did the stupid Trinitron TVs last? Just to get into the LCD market, they had to work in conjunction with Samsung.

Sony is partially going back to the way it was. Hopefully in a few years, we'll see Sony back to it's original luster. For me though, I don't bother with Sony electronics (cept items with the name Playstation in it). I've always found the quality to be lacking and it having a high price tag. I buy JVC.